WPCI dbv, / /|h:%_K,A<%&!gFKFN` $TC Lg5Cr޶2PG2^g^(销fP*.C: 6k7|h-Mi/Oz:Umy\^jQ}HǙ=*# LUNW % 0cU <w@J4U< 0f 0D:  [ J U:L  U: B AQ8 0D 0DB 0D D/ B D3HP LaserJet 4SiHPPCL5MS,,,,,,0nLh(hH  Z 6Times New Roman RegularX(;cW$XaBXXX-Bu Z$Arrus BT Roman !E"[#$U%U&'Ӏ(Ӏ2_##$3|x5)L  Z $Arrus BT Roman(W(3D$ cW!X4iXXX   `   0   \  D$X4iXXX `   1    ݀Apparentlytheinstrumentoriginallyindicatedthattheamountisdueon  June6,1994,butthedocumentwassubsequentlyalteredbyWaldronwithGaryDelffssconsenttoshow 1995,instead.(3$ !    a$ XzXXX   `   3    ݀Thisisthesupplementtothe1979boundvolume.  a$ XzXXX   `   2    ݀ThisrevisionwasplacedintoeffectonJuly1,1996. Q  a$ XzXXX   `   4    ӀAsapracticalmatterifthetestimonyofthepartieswasconsideredit  appearsthatthealterationwasmadewiththeconsentofGaryDellfs. ""  X?XXXUXX?   Ad FILEDX?XU  August31,1998CecilW.CrowsonAppellateCourtClerkdAh ,cAZ"Arial Regular ""  X?XXXUXX?   Ad FILEDX?XU  August24,1998CecilW.CrowsonAppellateCourtClerkdAh ,cAZ"Arial Regular d!" $&C<< CLevel 1Level 2Level 3Level 4Level 5(3$ !  (#$  0  ($$   1  ((' dxdP Pd'dxd cW!X4iXXX  TR[A' Legal3'A' Legal3'T7XXdd7    2(r )<,(j 8` `@E` 8ttxP,  r(222@ INTHECOURTOFAPPEALSOFTENNESSEE@!WESTERNSECTIONATJACKSON `  ______________________________________________ JOEWALDRON,   22 ` PlaintiffAppellant, `     h      p BradfordChanceryNo.20,214Vs. `     h      p C.A.No.01A019712CH00740    GARYDELFFSandwifeCLARA   DELFFSandJAMESCOYDELFFS,222t )>.*jx*` `@E}` 8ttxPV t2 ` DefendantsAppellees.   ____________________________________________________________________________@K K FROMTHEBEDFORDCOUNTYCHANCERYCOURT@& & THEHONORABLETYRUSC.COBB,JUDGE@JohnH.Norton,IIIofShelbyville@DD ThomasF.BloomofNashville@>>(ForAppellant@ AllenShoffnerofShelbyville@,,ForAppellee,JamesCoyDelffs$$@$ REVERSEDANDREMANDED  )%% @&Opinionfiled: `     h      p   W.FRANKCRAWFOR" "! D !#D, 2..  `     h      p   PRESIDINGJUDGE,W.S.CONCUR:ALANE.HIGHERS,JUDGEHOLLYKIRBYLILLARD,JUDGE#" "% 955  ;77 %&ћ&''& ` Thiscaseinvolvesanattempttorecovermoneyonaloan.Plaintiff/AppellantJoeWaldron(Waldron)appealsfromthetrialcourtsordergrantingjudgmentonthepleadingstoDefendant/AppelleeJamesCoyDelffs. ` WaldronsComplaintallegesthatonMay1,1991,DefendantsGaryandClaraDelffsborrowedfromWaldron$50,000ataninterestrateofthirteen(13%)percent.ThisindebtednesswastobedueandpayableonMay1,1992.InJulyof1991,GaryandClaraDelffsborrowedanadditional$30,000fromWaldronthatwasalsotobedueandpayableonMay1,1992.TheloanwasstilloutstandingonMay1,1992,atwhichtimeWaldronextendedtheloanforanotheryearandlentanadditional$4,000toGaryandClaraDelffs.Atthistime,anoteevidencingthetotalindebtednesswassignedbyGaryandClaraDelffs,aswellasbyJamesCoyDelffs,thefatherofGaryDelffs.Thesumplustwelve(12%)percentinterestwastobedueandpayableonMay1,1993.TheloanwasagainrenewedinMayof1993,atwhichtimeWaldronallegesthathewasowedtheprincipalindebtednessof$120,000pluseleven(11%)percentinteresttobedueandpayableonMay1,1994. ` WhentheloanwasagainnotpaidoffinMayof1994,thepartiesenteredintofurthernegotiationsthatresultedintheexecutiononJune10,1994ofthenoteatissueinthiscase.Thisinstrumentprovidesinpertinentpart:8 ` 8 ` !` !򄄄afterdate򄄄promisetopay'$$   8 ` 8 ` !` !totheorderofonehundredandfiftythreethousandand )&& fourhundredandfourtydollarsDollars+((   ̜&'&&'&(Thelanguageunderlinedwaswritteninbyhand.Unusedspaceisevidencedbyhyphens.)AcopyofthenoteisattachedasanaddendumtothisOpinion.Althoughthereissomeconfusiononthedocument,WaldronallegesthatthenotewasdueandpayablebyalldefendantsbyJune10,1995.  ##  1      ׀Allegingthatthisdocumentisa 522 promissorynote,Waldronsoughtjudgmentonthe noteintheamountof$174,014.72plusinterest. ` ThedefendantsfiledanAnsweradmittingthatWaldronmadecertainloanstoGaryDelffsbutdisputingtheamountsandinterestratesrepresentedinWaldronscomplaint.ThedefendantsalsoaverredthatthemoneywasloanedsolelytoGary )&& Delffs,thatthedefendantssignedthenoteinblank,andthatthenoteisunenforceablesincenoconsiderationwasprovidedforthedefendantssignatures.DefendantJamesDelffsfiledanAmendedAnswer,CounterClaim,andCrossClaimassertingthatthenotewasblankwhensignedandcompletedwithoutauthority,thenotewas fraudulentlyandmateriallyaltered,Waldronwasnotaholderinduecourse,aconditionprecedenthadnotbeensatisfied,thenotefailsforlackof 522 consideration,Waldronandtheotherdefendantsconspiredtodeceivehimintosigningthedocument,thenoteviolatestheStatuteofFrauds,andtheinterestrateonthenoteisusurious.Waldronfiledasummaryjudgmentmotion,andJamesDelffsfiledamotionforjudgmentonthepleadingsor,alternatively,forsummaryjudgment. ` OnJanuary10,1997,thetrialcourtenteredjudgmentonthepleadingsforJamesDelffsanddismissedthecomplaintastohim,findingthattheinstrumentfailedtoqualifyasavalidpromissorynote.ThetrialcourtalsofoundthatthisinstrumentwasnotasufficientmemorandumofapromisetopaythedebtofanothertosatisfytheStatuteofFrauds.InNovemberof1997,thetrialcourtenteredajudgmentagainsttheremainingdefendants.Thereafter,WaldrontimelyfiledaNoticeofAppealofthetrialcourtsJanuaryorder.JamesDelffsisthesoleAppelleeinthiscase. ` ThesoleissueforreviewiswhetherthetrialcourterredingrantingjudgmentonthepleadingstoJamesDelffs.XzXXXzԀWhenamotionforjudgmentonthepleadingsis /,, madebythedefendant,itisineffectamotiontodismissforfailuretostateaclaimuponwhichreliefcanbegranted.3NancyF.MacLean&BradleyA.MacLean,TennesseePractice,190(2nded.1989).Amotiontodismissforfailuretostatea 522 claimuponwhichreliefcanbegrantedistheequivalentofademurrerunderourformercommonlawprocedure. Cornporpstv.Sloan ,528S.W.2d188,190(Tenn. 966 1975).Suchamotionadmitsthetruthofallrelevantandmaterialavermentsinthecomplaintbutassertsthatsuchfactscannotconstituteacauseofaction. Id. ,at190.  Inconsideringwhethertodismissacomplaintforfailuretostateaclaimuponwhichreliefcanbegrantedthecourtshouldconstruethecomplaintliberallyinfavoroftheplaintifftakingalloftheallegationsoffactthereinastrue. Humphriesv.WestEnd   Terrace,Inc. ,795S.W.2d128,130(Tenn.App.1990).Acomplaintshouldnotbe    dismisseduponsuchamotion unlessitappearsbeyonddoubtthattheplaintiffcanprovenosetoffactsinsupportoftheclaimthatwouldentitletheplaintifftorelief. Id. ,at130(quoting Fuerstv.MethodistHosp.South, 566S.W.2d847,848(Tenn.   1978)).Intheinstantcase,thecomplaintseeksrecoveryonawritteninstrumentattachedasanexhibitandadetermination# XzXX Xz#XzXXXzofthevalidityoftheinstrumentisa  questionoflaw.Therefore,ourreviewofthetrialcourtsorderisdenovoonthe  recordbeforethisCourt. Warrenv.EstateofKirk ,954S.W.2d722,723(Tenn.  1997). ` Theinstrumentatissuewasexecutedin# XzXX XzM#Juneof1994.TheTennesseeGeneral  AssemblyamendeditsversionoftheUniformCommercialCode(UCC)in1995. ##  2      ׀ ! Thereisnodisputethattheapplicablestatutesinthiscasearethosethatexistedatthetimethatthedocumentwassignedin1994. SeeShellv.State ,893S.W.2d416, %"" 419(Tenn.1995)( [A]basicruleofstatutoryconstructionprovidesthatstatutesaretobeappliedprospectively,unlessthelegislatureclearlyindicatestothecontrary.);17AAm.Jur.2dContracts254(1991)( [I]tisthelawinforceatthetimea +(( contractualtransactionisconsummatedandmadeeffectualthatmustbelookedtoasdeterminingitsvalidityandeffect.). ` TennesseeCodeAnnotated473104(Supp.1992)  ##  3      ׀states: 1.. 8 ` 8 ` !` !(1)Anywritingtobeanegotiableinstrumentwithinthischaptermust:    8 ` 8 ` !` !(a)besignedbythemakerordrawer;and    8 ` 8 ` !` !(b)containanunconditionalpromiseorordertopay:633   8 ` 8 ` !` !8   h (i)asumcertaininmoney; LL 8 ` 8 ` !` !8  8hLL(ii)asuminmoneywhichisdeterminablebyaformulaasprovidedinthewriting,whetherornotsuchformularequirestheuseofextrinsiccriteria;or hh 8 ` 8 ` !` !8  8hLL(iii)asumofmoneytheamountofwhichissubjecttorenegotiationuponeitherthepassageoftimeortheoccurrenceofanevent. hh 8 ` 8 ` !` !(c)bepayableondemandoratadefinitetime;and    8 ` 8 ` !` !(d)bepayabletoorderortobearer.    Subsections(c)and(d)areindisputeinthepresentcase.Weshallfirstexaminethelattersubsection. ` Subsection(d)requiresthattheinstrumentbepayabletoorderorbearer. Id.   473104(1)(d).Since,thepartiesdonotdisputethatthedocumentisnotorderpaper,theissueconcernswhetherthedocumentconstitutesbearerpaper.TennesseeCodeAnnotated473111(1979)statesthataninstrumentisbearerpaperifitispayableto:8 ` 8 ` !` !(a)bearerortheorderofbearer;or    8 ` 8 ` !` !(b)aspecifiedpersonorbearer;or    8 ` 8 ` !` !(c) cashortheorderof cash,oranyotherindicationwhichdoesnotpurporttodesignateaspecificpayee.    Sincethereisnodisputethatsubsections(a)and(b)areinapplicableandthattheinstrumentinthepresentcaseisnotmadepayableto cashororderthereof,inquiryinthismatterfocusesonwhethertheinstrumentincludes anyotherindicationwhichdoesnotpurporttodesignateaspecificpayee. Id. 473111(c). (#  +((  ` NoTennesseecaseshaveaddressedtheissueathand.JamesDelffscitesdecisionsin Davisv.Davis ,838S.W.2d415(Ky.App.1992),and Parkerv.Pledger , /,, 601S.W.2d897(Ark.App.1980),inwhichcourtsinourneighboringstatesheldthatinstrumentsthatcontainblankspacewherethepayeeisintendedtobedesignatedarenotbearerinstruments.Thesedecisionsarefullysupportedbytheofficialcommentsto3111oftheUCC,asitexistedatthattime,whichstate:8 ` 8 ` !` !Paragraph(c)isrewordedtoremoveanypossibleimplicationthat Paytotheorderof_____makesan : 77 instrumentpayabletobearer.    T.C.A.473111CommentstoOfficialText.Wefindthatthesecasesareinappositetothecaseathand,sincethepartiesintheinstantcasedidnotleaveblankthespacedesignatedforthelistingofthepayee. ` JamesDelffsalsocites BroadwayMgmt.Corp.v.Briggs ,332N.E.2d131(Ill.   App.1975),acaseinwhichthefactualcircumstancesareremarkablysimilartotheinstantcase.In BroadwayMgmt. ,theinstrumentatissuereadsinpertinentpartas   follows:8 ` 8 ` !` !NinetyDaysafterdate,,we,oreitherofus,promiseto  paytotheorderofThreeThousandFourHundred  NinetyEightand45/100Dollars.(The  underlinedwordsandsymbolshavebeentypedin;theremainderisprinted.)Therearenoblanksonthefaceoftheinstrument,anyunusedspacehavingbeenfilledinwithhyphens.     Id. at132.Aftercitingtheaforementionedportionoftheofficialcommentsto  U.C.C.3111,theIllinoisCourtfound:8 ` 8 ` !` !Theinstrumenthereisnotbearerpaper.Wecannotsaythatit doesnotpurporttodesignateaspecificpayee.Rather,webelievethewordingoftheinstrumentisclearinitsimplicationthatthepayeesnameistobeinsertedbetweenthepromiseandtheamount,sothattheliteralabsenceofblanksislegallyinsignificant.     BroadwayMgmt. ,332N.E.2dat133.JamesDelffsalsocitesAndersonstreatiseon & ## theUCC,whichstates: Whenanoteisimproperlywrittensothattheblankforthenameofthepayeeshowstheamounttobepaid,thepaperisnotbearerpaper.RonaldA.Anderson,UniformCommercialCode3111:4,at27576(3ded.1994). ,)) However, BroadwayMgmt. istheonlyauthoritycitedbyAndersoninsupportofthis .++ contention. ` Webelievethattheholdingin BroadwayMgmt. isdifficulttoreconcilewith 2// areadingoftheofficialcommentstoUCC3111.Wheninterpretingsubsection(c),thecommentsspecificallystate:8 ` 8 ` !` !Instrumentspayabletotheorderofanestate,trust,fund,partnership,unincorporatedassociationorofficearecoveredbytheprecedingsection.Thissubsectionapplies :77 onlytosuchlanguageas Paycash, Paytotheorderofcash, Paytotheorderofonekegofnails,orotherwordswhichdonotpurporttodesignateanyspecificpayee.    T.C.A.473111CommentstoOfficialText.Interpretingthiscomment,WhiteandSummershaveopinedthat itappearsthatanydocumentwhichdirectspaymenttoortotheorderofaninanimateobjectqualifiesasabearerinstrument....JamesJ.WhiteandRobertS.Summers,UniformCommercialCode144,at621(3ded.   1993); seealso Crandall,Herbert&Lawrence,UniformCommercialCode16.3.1   (1996). ` Asstatedpreviously,T.C.A.473111providesthataninstrumentconstitutesbearerpaperifitispayableto  anyotherindication whichdoesnot  purporttodesignateaspecificpayee. Id. 473111(c)(emphasisadded).The  provisiondoesnotcontainanylanguagethatqualifiesthelanguage, anyotherindication. Id. Thereisnologicaljustificationforcreatingadistinctionbetween   thedesignationofaninanimateobject,suchasakegofnails,asthepayeeandthedesignationofacertainsumofmoneyasthepayee.Judiciallycreatingsuchadistinctionwouldriskuncertaintyforcontractingparties,thusthwartingtheveryintentoftheadoptionoftheUCC. See T.C.A.471102(2)(1996).Moreover, $!! Waldronaptlynotesthatitwouldappeartobea perversionoflogicifaninstrumentpayableto cashqualifiesasbearerpaper,whereasaninstrumentpayabletoaspecificamountofcashfailstoqualifyasbearerpaper.Therefore,wedeclinetofollowtheholdingoftheIllinoisCourtin BroadwayMgmt. and,instead, ,)) holdthattheinstrumentatissuequalifiesasanegotiableinstrumentsinceitconstitutesbearerpaper. ` Alternatively,JamesDelffsalsoassertsthattheinstrumentfailstoqualifyasanegotiableinstrumentbecauseitdoesnotsatisfytherequirementinT.C.A.473104(c)thatitbepayable atadefinitetime.JamesDelffsarguesthatsinceWaldronalteredthepayabledatefrom June10,1994"to June10,1995,"thereisambiguityonthefaceofthedocument.Thiscontentioniswithoutmeritfortwo :77 reasons.First,wearedealingwithamotionforjudgmentonthepleadings,andthenoteaspartofthepleadingsindicatesthatthepaymentdateisJune10,1995,whichwetakeastrue.Inanyevent,anegotiableinstrumentmustbe payableondemandoratadefinitetime.T.C.A.473104(c).Ifthepayabledatehadnotbeenaltered,weknowitwouldhavebeenpayableonthedatethatitwasexecuted,June10,1994.Therefore,itshouldbeconsideredademandnote. See T.C.A.473108   (1979); Inre:EstateofMyers ,55Tenn.App.195,206,397S.W.2d831,837   (1965).Thus,thefactthatthenotewasalteredenuredtothebenefitofJamesϜDelffs. ##  4      AsapracticalmatterifthetestimonyofthepartieswasconsidereditappearsthatthealterationwasmadewiththeconsentofGaryDellfs.   ` SincethenoteatissuesatisfiesthecriteriasetforthinT.C.A.473104,itqualifiesasanegotiableinstrument.Accordingly,theorderofthetrialcourtdismissingplaintiffscomplaintagainstJamesDelffsisreversed,andthiscaseisremandedtothetrialcourtforsuchfurtherproceedingsasarenecessary.CostsoftheappealareassessedagainsttheAppellee.XzXXXz `     h      p _________________________________   `     h      p W.FRANKCRAWFORD,    `     h      p PRESIDINGJUDGE,W.S. # XzXX XzE# !   CONCUR: "    XzXXXz____________________________________ $!! ALANE.HIGHERS,JUDGE # XzXX XzG# %""  XzXXXz____________________________________ '$$ HOLLYKIRBYLILLARD,JUDGE # XzXX XzH#ԛ    &